The protracted economic slump in developed countries is accelerating the shift of global economic power to emerging markets, industry sources said.
A recent report from the International Monetary Fund said the gross domestic product of emerging markets is forecast to increase to $44.1 trillion this year, surpassing $42.7 trillion of the developed countries for the first time in history.
The outlook for GDP came as developed countries cut government expenditure more than emerging economies. The report added that the GDP gap between the two sides was likely to widen, soaring to $10 trillion in four years.
Investment in emerging markets overtook those in developed countries last year, according to the IMF.
“The global economic growth will be led by rising demand from emerging markets. The U.S. and Europe will cut their fiscal spending this year further than last year, which will be offset by emerging countries in making the global economy recover,” said Park Seung-young, an analyst at Taurus Investment & Securities.
Reflecting the accelerating power shift in the global market, industry watchers advised the government and companies to develop a diversified portfolio to promote exports in emerging markets.
The nation’s outbound shipments to emerging countries soared to 72.8 percent of its total exports or $386.4 billion, according to the Ministry of Knowledge Economy, while exports to advanced economies declined to 27.2 percent last year.
“The problem is that Korea’s exports in emerging markets have heavily depended on China and it has to tap other emerging markets like ASEAN and Middle East further,” Lee Seung-hoon from Samsung Securities said.
In 2012, China was the nation’s biggest export market, taking 24.5 percent of the total export, but China’s economic growth has gradually been affected by the prolonged global economic downturn. Its GDP rose 7.4 percent in the third quarter last year, the lowest growth in the past few years.
The Korea Trade-Investment Agency, responsible for the nation’s export promotion, is moving fast to diversify the export portfolio in emerging markets. It divided emerging markets into three categories ― large-scale, emerging, and potential markets and will develop different export promotion activities for each category, the agency officials said.
By Seo Jee-yeon (email@example.com